Policy Recommendations of Sep 2014 Conference

Recognising the risk prone nature of small scale farming the conference has clearly recommended that integrated farming model is the most appropriate to make the small scale farming viable and sustainable whereby combination of crop cultivation with animal husbandry including dairy, poultry, goats/ sheep etc. along with fisheries shall be undertaken.

While the appropriate model and the scale would be location specific, gleaning from the experience shared from the conference three broad models have been suggested where in one model the access to credit is what is need to be achieved to support the small farmers. And the model two is about collectivization and aggregation and the model three is about value addition to the produce to meet the market requirements.

The conference therefore strongly recommend that the approach to make the small farming viable and sustainable which build on existing practice and organise the farmers through a process of graduation into farmers producers organisation / companies.

The Conference declared that organizing small farmers under the producer company framework would pave the way for raising economic profile from being a survival and subsistence mode to a sheer business proposition. This process of change to being an entrepreneurial farmer would impact (which has already started happening) the SHG eco system wherein the women members are taking to farming involving crop, animal husbandry and fisheries. Therefore, the Conference recognized the promising potential of farmers’ producer companies towards greenpreneurship whereby women take the mixed farming as business ventures with focus on environmental concerns.

As for the size and scale of the producer companies, the Conference came out with the recommendation that most critical aspect is adding value to the farmers and this process of adding value would determine size and scale of operations. Which means one size fits all approach won’t work and the complexity and diversity of the context and the nature of farming brings greater challenge to the stakeholders.

Flowing from the above recommendations and also the experience gained from the work so far, the Conference recommend a gradual approach keeping in view the capacity of the enabling institutions including NGOs/civil societies and also the farmers. Simple aggregation which may not involve processing of the produce and commodities but involve “buy, hold, grade and sell” would enhance confidence in the process of morphing from small farming to doing business.

It has also been suggested that to gain confidence and trust of the farmers the above approach is necessary and more so success in the initial stages would trigger the process of small farmers getting organized under the FPC framework.

As for the technology of cropping and other farm related technological intervention, given that small holdings preponderate in rainfed eco system, crops which consume less water and of short duration have been demonstrated to be suitable. In this respect the trio of pulses, small millets and oil seeds are eminently suitable for small farms rainfed eco system and need to be propagated.

Keeping in view the imperatives of enhancing the productivity of small scale farms, the conference strongly recommends two appropriate low cost technologies namely tank silt application and construction of farm ponds. This is highly critical in rainfed eco systems.

In irrigated conditions, particularly for rice conference strongly advocates adoption of System of Rice Intensification for maximizing production in the given unit area.

In the light of labour shortage and also the need to reduce the drudgery and enhance the efficiency of farming operations, farm mechanisation need to be accelerated and access to machinery / equipments is made hassle free and economical. In this respect, the conference appreciated the initiatives of custom hire service centre in Karnataka by the State Government with SKDRDP and recommend that its reach is expanded to the Panchayat level and similar initiatives undertaken for the benefit of small farmers throughout the country.

As multiple services are required by small farmers while doing integrated farming and that incentives including subsidies offered by the Government are accessed hassle free the conference strongly recommends putting in place single window system at the district / block level by the State Government. This would go a long way in helping the small farmers to get timely services and remain focussed on farming operations.

Recognising the larger concern of migration of youth from rural areas and farms, it is recommended that adequate incentives and support structure are put in place depending on the context to retain the youth in agriculture and organise them for scale and sustainability.

As for financial inclusion of small farmers the conference recommends that each and every small farmers shall have access to kisan credit card with RuPay card facility.

As for access to credit from Commercial Banks the producer companies require a special dispensation in terms of liberalised lending norms.

Small farmers don’t have much of capital to put in as equity in FPC and also the fact that they cannot offer collateral as they have none, the Banks should have an innovative way of lending with relaxed norms without reference to capital and collateral rather there is a need to look at the social capital of the farmers and their farming activities and plan.

Unlike the big farmers, small farmers lack capital and capacity to organize themselves into company. Philanthropies and mainstream institutions including Government and development institutions need to invest grants in promoting producer companies for a time frame for at least 3-5 years. This is very much similar to the building of social capital of women through SHGs and within federations in terms of recognizing the need for grant for promotion.

In this respect, Small Farmers; Agriculture Consortium (SFAC) and NABARD and in the light of new Company act, CSRs of Commercial Banks need to invest in promoting producer companies and extend grant support for this process.

Access to appropriate risk financing is quite critical for the viability of small farming as need to protect the farmers against the risk faced by the crops they raise and the livestock they tend. Governments and NGOs need to enable small farmers for accessing suitable insurance schemes combining mutual and mainstream products.

Building capability of small farmers and their collective capacity is not only important but a continuous process with hand holding wherever it required. The conference recognise the need for building organisational / Governance literacy, technological literacy, financial literacy and market literacy and recommends public investment through grand support for such programmes / activities.

All said and done, the conference highlighted the need for convergence of stakeholders involving Government, Commercial Banks, NGOs, philanthropies to work together in supporting small farmers for delivery of various services and scaling up including enabling them for running agri businesses. And this presents new opportunities for partnership and collaboration among the various stakeholders.

Educated youths are not going back to the farm. As a result innovation of new technology in farming is getting stagnated. Also cultivate of land is getting reduced. Main food crops are being discarded

Help from NGO sector should be sought in organizing the village level youth into Joint Liability Groups (JLGs) and providing them with necessary motivation, training and capacity building for entering into farm activities and staying back in the villages.

To permit nodal NGOs for undertaking this work. In the initial phase 20 districts in the country may be chosen for intensive JLG promotion.

The NGO may be compensated suitably based on the results obtained. The youths may be specially deputed to RUDSETIs and RSETIs for training in farm technology.

Not possible to have economy in agriculture due to price fluctuation.

Farmers are not taking up large scale farming activities.

National Agricultural Price Commission to widen its sphere of activity for taking into account regional issues and challenges at the district level to fix the prices for a viable farming activity.

NGOs may be facilitated to promote JLGs in large numbers and having a definite agenda for season based multiple cropping to protect the soil condition.

Lack of investment and pension options for the farmers

The money market investments like mutual funds and pension instruments have not reached into the village level. Therefore the small and marginal farmers have no instruments for investments and savings.

A special training with sufficient incentive for popularizing National Pension Scheme and also the insurance/mutual fund investment schemes. Govt. to earmark promotional funds to be disbursed through NGOs based on the result.

Lack of Special schemes for women in agriculture.

Participation of women in farming has gradually coming down, which has directly impacted the labour availability in the farming sector.

Farmers do not have space to store their products, specially vegetables, cereals, crops in turn reduce the quality/ life of the stocks resulting in price crash.

The government to initiate schemes for warehousing in the lands of small farmers.

Lack of interest subsidies to JLGs

At present interest subsidies given to crops taken directly by the farmers from the banks. While millions of farmers were involved in farming but who do not have proper title deeds who cannot taken bank loans are deprived of subsidies on interest.

All the farmers who cannot take loan from the bank should be brought under JLG implementation and priority given to JLGs take to farm activities.

Reserve Bank of India :

Lack of adequate credit.

Farmers depend on money lenders for borrowing for credit needs in the farm sector. This has also impacted on psychological mind set on the farmer.

Reserve Bank of India permit to promotion of JLGs groups and adequate finance to JLG groups. The RBI to review the present lending permanent limit in the JLG groups. Cost of purchasing the farm equipment and live stock and farm materials have gone up to drastically for one cow for Rs. 50,000/-, one power tiller Rs. 1.50 lakh, one tempo Rs. 4.00 lakh etc. under such circumstances the credit limit should be revised to at least Rs. 5.00 lakh per member.

Lack of branch network

Farmers are deprived of accounts.

Promotion of small finance banks.

Crop insurance

Lack of insurance for crops

Crop insurance policy to be developed.

BANKS:

More documentation procedure

Farmers find difficult to understand the document requirements hence they relay o local resources for finance which is easily available from money lenders, local financiers.

The documents must be made simple, readable and understandable by the farmers.

A special format may be designed specially for usage for farmers,

No access to banks

So farmers depend on local sources for credit. Spend money for visiting bank branches. Farmers need to travel a lot to get a bank branch. It becomes more expensive for them to have regular bank transactions.

Exclusive rural branches with selective bank services, bank collection centres on certain definite days in a week may be established.

Difficulty in understanding bank schemes

Farmers find difficult to understand the various schemes available to them. Hence they relay o local resources for finance which is easily available from money lenders, local financiers.

The bank branch should display the schemes in local languages near its branch.

NABARD:

NABARD should promote subsidy schemes for demonstration and application of latest technology.

Farmers are dependent on traditional methodology/ technology.

NGOs should be assisted to establish more and more training institutions in different villages for providing training and capacity building.

Necessity to organise farmers

Small and marginal farmers are not organize at the village level to address their problems.

Promotion of JLGs through NGO support.

Lack of coordination between line departments

The facilities are not flown to the farmers need to frequent visit to various departments for single objective.

NABARD should form district level committee and NGO representatives must be included in the committee for coordination.

Best practices, solutions available are not made known to farmers

Farmers do not adopt the best practices.

NABARD should regularly support NGOs for training and visit of farmers to various practitioners’ best practices. NABARD should identify these best practices and award them as a best model.

Agri Universities:

No link between farmers and Agri Universities

The last line delivery of the innovations of the universities are not reached to the farmers.

Updated trends and developments are not known to farmers.

Lack of liaison between farmers and innovators.

Results of Research and developments not connected to farmers.

The universities should develop relationship with NGOs the latest developments, innovations must be known to the farmers through NGO seminars, workshop. The universities must compulsorily conduct to state level seminars in association with NGOs.